ECB revokes licence of Estonian bank amid money laundering probe
28 Mar 2018

The European Central Bank has revoked the licence of small Estonian bank Versobank AS over failures to remedy regulatory breaches in areas such as money laundering, the Estonian financial watchdog said.

The action taken against Versobank comes as the Baltic states’ leaders prepare for a summit with U.S. President Donald Trump in Washington next week where they will be keen to showcase efforts to stamp out money laundering, a key concern for Washington in the region.

Latvia is trying to restore confidence in its financial institutions after U.S. accusations that the euro zone state’s third biggest bank, ABLV, was serving as a conduit for illicit funds. The bank, whose former management denies wrongdoing, was shut down last month.

Latvia has also moved to ban shell companies – entities often used in money laundering.

The ECB withdrew Versobank’s licence after a request from the Estonian financial watchdog.

Estonia’s watchdog, the Finantsinspektsioon, said the action against Versobank was “an isolated case” and did not affect other banks in the eurozone country.

“The withdrawal of the authorisation of Versobank AS is a clear signal that Estonia will not tolerate breaches of anti-money laundering and combating of terrorism law,” watchdog Chairman Kilvar Kessler said in a statement.

– By David Mardiste, Reuters, 27 March 2018

Link here to the Reuters article.

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